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Rental income and tax obligations of employees

Second acquisition of property for the purpose of its lease is a possibility to have a regular passive income in retirement. Employees having rental income must reckon with tax compliance.

Investing in the acquisition of another property is for many people in the current low interest rate mortgage loans attractive. Regular passive income from rental costs to mortgage minimize and after repayment of the mortgage loan in the retirement age will be rental income important own financial source in retirement. "Paying a mortgage loan affects family farming in the long term, so it is advisable when selecting a mortgage and set their parameters consult a specialist and choosing mortgages devote sufficient time as well as real estate selection, "says Emil Brooch (FinFocus).

The obligation of filing tax returns

For most employees handled their employer tax obligations through the annual tax settlement. Employees having other taxable income, before deducting the expenses of CZK 6,000 but not the employer of the annual tax apply and must file their own tax returns. Employees having regular rental income they need for completing tax returns from your employer confirmation of taxable income for the year. The rental income is subject only to the payment of taxes on personal income tax, social insurance and health insurance from the rental income does not pay, so you need only submit a tax return for income tax to local tax authority. In the first year of the acquisition of property must also submit a tax return for the property on the local tax authority, when buying property in 2016 till the end of January 2017. The property tax is paid for the year to the end of May and the tax is paid to the property owner January 1 of that year.

You can not deduct the interest on a mortgage loan

Interest paid on a home loan is one subject to statutory conditions among taxable items decreasing tax base and consequently also calculated income tax. The basic condition is that a mortgage is dealt their own housing needs. "For rented property therefore can not claim a tax deduction of interest paid on a mortgage loan," says Emil Brooch.

How to claim expenses?

For rent is applied either actual expenses or the cost of 30% tariff. If the actual expenses low, and staff with a rental income due to a tax simplicity, it chose expense allowance. In this case, you need to have proof of income for the full year and expenditure accounts for 30% of annual revenue. In applying the expenditure fee it is necessary to count with the fact that any additional costs can not be longer apply, and all are included in the expense allowance.

When can I claim tax relief on children?

Some employees have concerns about the application fee expenditure, even though for them it is easier and more convenient to be able to claim tax relief for children or a tax deduction for a spouse with their own incomes not exceeding CZK 68,000 per calendar year. When using a flat-rate expenditure actually can these two tax rebate in your tax return to apply. However, when partial tax base is claimed expense allowance, is lower than 50%, then it is possible to claim tax relief for children and a tax deduction for a spouse with their own incomes to the limit. "Because the majority of employees with incomes from renting a partial tax base the employment of more than half of the total tax base, can claim tax relief for children and a discount on his wife with incomes up to limit spending, even at the flat rate for rent, "explained Emil Brooch.

Source: tz, editorially modified

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